MADRID—The Spanish antitrust organization CNC has imposed fines of $11.7 million on two elastomeric foam companies that operated a price fixing agreement for more than a decade, the CNC said in a statement.
The CNC said two firms, Armacell Iberia S.A. and L'Isolante K-Flex Espana had agreements spanning at least 11 years, to increase sale prices and share out the market
The CNC said it was imposing the fine in accordance with Article 64.1 of the Spanish Competition Act.
The companies agreed to increase sale prices and respect each other's client base over a period of at least 11 years in all of Spain, said the CNC. It added that the two firms had a market share of 80 percent of the market.
It therefore involved a concentrated market, where buyer power is highly fragmented due to the product's numerous applications. A key fact in helping the CNC to impose the fine was the way that prices increased between 5 and 10 percent, and that those increases applied even when demand was falling. There is no doubt that the conduct produced effects on the market for more than a decade, said CNC.
Armacell Iberia and its parent, Foam Investments II SARL, is being fined $8.6 million L'Isolante K-Flex Espana and its parent L'Isolante K-Flex Espana S.R.L. is being fined $3.1. If the Spanish companies cannot pay the fines. the CNC will pursue the parent companies.
This is the second time in recent months that the Spanish Cartel authority has fined companies operating in the flexible foam sector. In March, fines of $34.7 million were imposed on companes in the sector.